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Impacts of Low-Carbon Agriculture Marcelo Marques de Magalhães Universidade Estadual Paulista, Campus Tupã, São Paulo, Brasil In collaboration with: INTRODUCTION The production estimates for the Brazilian grain harvest for 2012/13 from the National Supply Company point to a volume of million tons, to be harvested from 53.3 million hectares. The production represents a record volume, about 12% higher than that obtained in the 2011/2012 harvest, while the harvested area grew about 3%. The preliminary estimate for average productivity in this harvest could reach 3.49 tons/ha, almost 11% higher than in the previous harvest (Conab, 2013). Agriculture has shown increasing productivity in recent years, corresponding to the need for expanding production as a function of the growing demand for food and energy. The challenge for the sector is to match the gains in agricultural productivity to the concerns about the adverse effects of climate change. Agriculture contributes to greenhouse gas emissions both through consumption of fossil fuels and through its own biological process of production, including the processes of anaerobic decomposition in wetland farming systems and animal residues. In recent years the Brazilian agricultural sector has shown systematic increases in the net emissions of greenhouse gases (GHG) (Mozzer, 2011). The international discussion about the environmental costs of agricultural practices is already on the agenda to be incorporated into international trade negotiations. The USA and European Union are wading into the debate on mechanisms for border adjustments (taxes and subsidies) to deal with the problem of shifting of production to countries where the cost of polluting is lower (leakage effect). For now, there is still no multilateral trade agreement on the incorporation of liabilities created by greenhouse gas emissions. However fragile, that context of the debate on adverse effects of climate change has given rise to voluntary initiatives for the creation of a regulatory framework at a national level, to allow the application of environmental laws and the mobilization of funds for investments in the mitigation of GHG emissions. International trade still faces the unresolved issue of dealing with the costs of adopting practices for reducing GHG emissions, without a common mechanism for equalizing prices at the border, adjusted according to the concepts of adaptation, mitigation, and efficiency (Seroa da Motta, 2011). Agriculture is a key sector in policy-making for purposes of reducing carbon emissions and sequestration. Brazil is among the countries that have voluntarily committed to reducing GHG emissions at the 15th Conference of the Parties of the UN (COP- 15) in 2009, reaffirmed the following year, at the COP-16. The Brazilian strategies for reaching the targets agreed to in the COP- 15 were approved by Law No , through which the National Policy on Climate Change (PNMC) was established. The mitigation strategies for the agricultural sector were laid out in the Sectorial Plan for Mitigation and Adaptation to Climate Changes, aimed at the development of the Low-Carbon Agriculture Plan (ABC Plan). This plan gave rise to the Low-Carbon Agriculture Program (ABC Program), implemented in That program is the result of an effort to adopt a new agricultural model that seeks to mitigate GHG emissions, combining the restoration of degraded lands, protection and better management of natural resources through practices aimed at improving production efficiency. The aim of this study is to evaluate the goals of the ABC Plan in terms of their potential for reducing emissions and implementation of the ABC Program. This analysis is carried out using secondary data sources. Section 2 introduces the goals, their sectorial distribution and the role of agriculture in the National Policy on Climate Change (PNMC). Next, there is an in-depth look at the targets for the agricultural sector, established by the Low-Carbon Agriculture Plan (ABC Plan). The potential for emissions reduction from these targets is discussed in Section 4, followed by an analysis of the budgetary implementation of the Low-Carbon Agriculture Program (ABC Program) in Section 5. The final section presents the conclusions. NATIONAL POLICY ON CLIMATE CHANGE The National Policy on Climate Change (PNMC) formalized the voluntary targets for reduction of GHG emissions proposed at the United Nations Framework Convention on Climate Change (UNFCCC), which are in the range of 36.1% to 38.9%, in relation to the emissions projected for On the other hand, the PNMC has autonomy in relation to international agreements on global trade and climate change. Besides the targets, the PNMC establishes a legal benchmark for regulation of the country s mitigation and adaptation actions, defining principles, guidelines and tools to strengthen a low-carbon consumption economy. The PNMC regulations defined the distribution of targets and parameters for the projection of targets and for formulation of sectorial plans for emissions mitigation. Table 1. Voluntary agreements for the reduction of GHG. The portion to be mitigated in 2020 is between 36.1% and 38.9% of the total emissions per year, which corresponds in absolute terms to the values of 1,168 and 1,259 million tons of CO 2 -eq. Subtracting the proposed reduction, the volume of CO 2 -eq emitted in 2020 would be between 2,068 and 1,977 million metric tons. Relative to the volume of emissions in 2005, the reduction would be between 6% and 10%. The actions for mitigation aimed at the 2020 targets are distributed in four sectorial plans change in the use of land and forests, agriculture, energy and the set of industrial processes and waste treatment. The projection for emissions and the sectorial distribution of the targets for reduction are shown in Table 1 below. This presents two targets, given in terms of two scenarios for the growth trend in the economy for Sectors Emissions (millions t CO 2 eq) Total Reduction (%) Estimate 2005 Projection 2020 Variation (%) Target 36.1% Target 38.9% Reduction (millions t CO 2 eq) Target 36.1% Target 38.9% Change in land and forest use ,7 24,7 24, Agriculture ,7 4,9 6, Energy ,8 6,1 7, Industrial processes, waste treatment ,0 0,3 0, Total ,8 36,1 38, Source: Brasil (2009a, 2010) The emissions projection for changes in land use, of 1,404 million tons of CO 2 -eq takes into account that 68% corresponds to the Amazon, 23% to the Cerrado and 9% to the Atlantic Forest, Pantanal and Caatinga. In the other sectors, the projections were of 730 million tons of CO 2 -eq for agriculture, 868 million tons of CO 2 - eq for energy and 204 million tons of CO 2 -eq for industrial processes and waste treatment. The breakdown of the targets attributed greater weight to reducing emissions for changes in land use (24.7%), which translates into a greater control over deforestation, through which total emissions could be reduced to 801 million tons of CO 2 -eq. Factoring in respectively the scenarios for lowest and highest economic growth by sector, the distribution of the remaining targets in the other sectors is of 4.9% and 6.1% for agriculture, 6.1% and 7.7% for energy, 0.3% and 0.4% for industrial processes and waste treatment. The projection for agricultural emissions in 2020 corresponds to an increase of 50% relative to emissions in 2005, the lowest among the production sectors. Agriculture, in addition to being among the sectors that make the greatest contribution to the country s growth, also transfers part of the environmental efficiency to the energy sector through the substitution of fossil fuel consumption by biofuels (Cerri et al., 2010). Since the highest burden in the reductions is in controlling deforestation, a greater effort must be undertaken by agriculture relative to the other sectors. The challenge will be to put in place sustainable growing systems that maintain the gains in productivity in the sector (Mozzer, 2011). LOW-CARBON AGRICULTURE One of the points that makes agriculture a key sector with respect to mitigation policies for the adverse effects of climate change is food security. Along with the growing demand for food products, agriculture must also meet the demand for biofuels. This pressure for expanding production is restricted by the limits on contribution to GHG emissions, which imply limits on the expansion of agricultural land on native vegetation. The actions for mitigating the adverse effects of climate change make use of two complementary mechanisms, the reduction in emissions itself and the sequestration of carbon in the soil and the plant mass. The pressure to maintain productivity gains will necessitate better efficiency in the use of inputs, resulting in better management of the natural resources. Measures for recovery of degraded lands, in particular pastures, connected to development of productive efficiency, will reduce the pressure on native vegetation areas, thereby helping to control deforestation. On the other hand, the agricultural sector, as a result of its characteristics and sensitivity, is extremely vulnerable to the negative effects of climate change, distinguishing it from the other sectors. Thus, the organization and planning of actions leading to the adoption of sustainable growing technologies in the field also aims to reduce the sector s vulnerabilities. The potential spillover effects of positive results of implementing a growing model combining agricultural productivity and sustainability emphasize the positive role this sector plays in mitigating GHG emissions. The importance of voluntary mitigation actions for insertion into international trade are in cancelling out the impacts of border adjustment measures that transfer the costs of mitigating GHG emissions. By emphasizing the importance of sustaining agricultural production levels, developed countries curb the exchange of the negative effects of emissions-mitigating actions on agricultural productivity. Tied to this pressure, there is an expectation to set up unilateral measures for shifting the costs of adopting GHG emissions-reducing practices in specific sectors, through nontariff policies (Seroa da Motta, 2011). There is still a need for the UNFCCC to recognize the contribution of measures for reducing agricultural emissions to the integrity of the global climate system. The specific mechanisms for the sector should factor in the contribution of reducing deforestation and of sustainable growing systems, and the added contributions of the effects of mitigation, among them carbon sequestration in the soil and biomass. In the absence of an international agreement, the countries with the greatest share of emissions move forward with the introduction of sector-specific methods for mitigation. The absence of a multilateral agreement leaves space for the unilateral application of mechanisms for equalizing prices in the domestic market in relation to the international one. The actions to establish a low-carbon agricultural model should contribute to minimizing the impact of border adjustment measures on Brazilian competitiveness in the international market for agricultural products. The Low-Carbon Agriculture Plan (ABC Plan) was instituted in 2010 and consists of a set of sectorial plans from the PNMC. Besides the actions to reduce or avoid GHG emissions, it established a support component for training technicians and farmers, financing for research and development, and monitoring of activities and results (Brasil, 2010). In terms of physical targets, the ABC Plan has the following objectives: (i) to promote the recovery of 15 million of the current 60 million hectares of degraded pastures; (ii) to promote systems of crop-livestock-forestry integration on 4 million hectares; (iii) to increase the practice of no-till planting on 8 million, above the current 25 million hectares; (iv) to increase the use of the technique of biological nitrogen fixation on an additional 5.5 million hectares; (v) to plant 3 million hectares with planted forests, alongside the sectorial plan that forecasts 5 million more hectares for steel mills; and (vi) to promote the treatment of 4.4 million m3 of wastes from animal husbandry. Still in 2010, the ABC Plan already was counting on funding from the federal government to finance investments, within the Agriculture and Livestock Plan (2010/11 Harvest Plan) from LOW-CARBON AGRICULTURE the Ministry of Agriculture, Livestock, and Food Supply (MAPA). Starting in 2011, the actions of the ABC Plan incorporated the Program for Reducing Greenhouse Gas Emissions in Agriculture (ABC Program), into the 2011/12 Harvest Plan. The goals of the ABC Program are: (i) to reduce greenhouse gas emissions stemming from agricultural activities; (ii) to reduce deforestation; (iii) to bring rural properties into compliance with environmental legislation; (iv) to increase the land area of cultivated forests; (v) to stimulate the recovery of degraded lands. Although some goals are not strictly directed at reducing emissions, such as recovery of degraded pastures, this can increase the efficiency of the natural resource usage, minimizing the pressure on lands containing native vegetation. The ABC Program finances growing projects with the following aims: (i) recovery of degraded pastures (ABC Recovery); (ii) establishment and improvement of organic systems of agricultural production (ABC Organic) 1 ; (iii) establishment and improvement of systems for no-till planting (ABC No-Till Planting); (iv) establishment and improvement of systems of crop-livestock integration (ilp), livestock-forest or croplivestock-forestry (ilpf) integration and of agroforestry systems (AFS) (ABC Integration); (v) establishment, maintenance and improvement of management of commercial forests, including those destined for industrial use or for charcoal production (ABC Forests); (vi) adaptation or regularization of rural lands in compliance with environmental legislation, including recovery of legal reserves and of permanent preservation areas, recovery of degraded lands and establishment and improvement of plans for sustainable forest management (ABC Environmental); (vii) treatment of wastes and residues resulting from animal production for generation of energy and for composting (ABC Waste Treatment); (viii) establishment, improvement and maintenance of oil palm forests, particularly on degraded agricultural lands (ABC Dendê); (ix) promotion of the use of biological nitrogen fixation (FBN) (ABC Biological Nitrogen Fixation). The current objectives and lines of financing are the result of changes introduced with the development of the Program. In 2012, specific lines of financing were introduced for costing, commercialization and investments in organic systems of production. The establishment and maintenance of oil palm forests with a focus on recovery of degraded farm lands also became part of the program. This activity also is part of the Program for Sustainable Growth of Oil Palm in Brazil, launched in At the beginning of the ABC Program, the interest rate was 5.5%, lowering to 5% in the 2012/13 harvest, with the goal of decreasing the difference relative to existing rates in alternative programs. 1 There are still no conclusive studies on the differential effects of organic systems of production on GHG emissions (FGV, 2013). On the other hand, organic systems are characterized by small-scale production, low intensity in the use of external inputs and high degree of the manual labor usage. These can be an alternative for small growers, with limited access to land and high availability of family labor. POTENTIAL FOR REDUCING EMISSIONS Most of Brazil s GHG emissions in the first decade of this century were produced by deforestation, in order to make room for agriculture and livestock farming, mainly in the Amazon. Cerri et al. (2009, 2010) analyzed the effective and shared contribution of agricultural activities with the goal of identifying the best mitigation options for Brazil. First are shown the main sources and the estimates of their contribution to emissions. Next, there is an evaluation of the mitigation potential of selected agricultural and livestock practices, including integrated growing systems. Main Sources of Brazilian GHG Emissions The analysis of emission sources carried out by Cerri et al. (2009, 2010) referred to the methodology of the Intergovernmental Panel on Climate Change (IPCC) for the inventory of GHG emissions, which considers agriculture as part of the Land Use, Land Use Change and Forestry (LULUCF) sector. This sector is subdivided into two subsectors: (i) Land Use and Forestry and (ii) Agriculture. The first represents emissions and the removal of native vegetation through deforestation, changes in the stock of wood biomass, abandonment of managed forest lands and land stock. The agriculture subsector represents GHG emissions from enteric fermentation, waste management, wetland crops, burning of agricultural residues and losses in the stock of agricultural soil. Emissions from the use of chemical fertilizers, organics, animal urine and manure, and vegetable residues are tracked in agricultural soils. The first Brazilian report on greenhouse gas emissions refers to the period from 1990 to 1994, in which emissions were estimated to be 1,728 million tons of CO 2 -eq. The main sources identified were: (i) deforestation, responsible for more than half of the Brazilian GHG emissions (56.3%); (ii) fossil fuels (15.8%); (iii) enteric fermentation (13%); and agricultural soils (9.8%). Global GHG emissions increased 17% in the period from 1994 to Brazilian emissions increased 48.9%, in China they increased 88.8% and in India, 62.1%. The change in Brazilian GHG emissions estimated in absolute terms was million tons of CO 2 -eq in the same period. The subsectors that made the greatest contribution to this change were fossil fuels (36% of the increase), agriculture (33%) and changes in land use and forestry (24%). Within the agriculture subsector, enteric fermentation and agricultural soils were responsible for 99% of the emissions, with 53% coming from the former and 46% from the latter. Agriculture plays a key role in reducing emissions by contributing directly or indirectly to mitigation in other sectors. The increased productivity in the field reduces the pressure for deforestation and the production of biofuels increases the range of renewable sources that can be substituted for fossil fuels. The results of academic studies and research and development presented below offer a brief assessment of the contribution of agricultural practices and activities that combine sustainability and productivity, among them no-till planting, sugar-alcohol production, recovery of degraded pastures, and livestock intensification. No-Till Planting The no-till planting system aims to avoid compaction of the bottom layer of soil by aerating it. The reduced movement in the soil would eliminate carbon losses, lowering emissions when compared to conventional planting. The soil s capacity for carbon sequestration is subject to a series of environmental and technical factors. The region s predominant climate type, the climatic variation, variations in the practices used, the variation in the quantity and quality of plant residues (carbonto-nitrogen ratio) are among the factors that affect the process of carbon fixation in the soil. It must be noted that the quantity that can be accumulated has a ceiling, given by an equilibrium state that limits the sequestration process. The depth considered in the evaluation of the soil stock also can report incompatible results among different studies. Finally, the gains by carbon fixation in the soil are reversible as a function of the variation in those same factors mentioned previously (Smith et al., 1998; apud Cerri et al., 2009:839). The estimates for carbon accumulation in t

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